California's budget deadline looms with a more civil tone in Capitol

SACRAMENTO -- The knockdown, drag-out partisan fights, stretching on for months, are history. These days, state budget negotiations are downright cordial.

According to Capitol sources briefed on closed-door budget negotiations, the administration of Gov. Jerry Brown and Democratic lawmakers have quietly reached deals on funding prekindergarten, pumping more money into the state's beleaguered court system and funding levels for the state's controversial bullet train.

Suddenly robust state finances and voter-approved measures that made it possible to pass a budget with a simple majority and dock lawmakers' pay if they don't meet the June 15 deadline to pass a budget are responsible for much of the civility. But this year's discussions also showed that Brown and the Democratic-controlled Legislature that some had predicted would want to spend wildly are pretty much on the same page.

"They have a lot of differences, but at the end of the day, the differences are not so great that they can't find a way to compromise and get the budget done on time," said Bill Whalen, a research fellow at Stanford's Hoover Institution and top aide to former Republican Gov. Pete Wilson.

Previously, legislative leaders had already struck deals with the Brown administration on some key issues, including a new "rainy day fund" and a plan to fund teacher pensions. And they're expected to spend the rest of the week ironing out several other deals ahead of the midnight Sunday deadline.

Deciding whether to allow home aides who work for the state's In-Home Supportive Services program to earn overtime pay could prove to be the most thorny issue in this year's budget talks. Meetings on the topic have been "heated," said sources with knowledge of the discussions.

Advertisement

New federal rules require America's in-home workers to get overtime pay starting next year, but Brown says it will be too costly for California and instead wants to limit aides to 40-hour work weeks.

After proposing a $160 million increase in spending for California's courts, Brown has reportedly agreed to another modest bump in funding for the judicial system, whose budget was hit hard at the height of the state's financial crisis.

And while the governor would not agree to back Senate President Pro Tem Darrell Steinberg's $1 billion plan to enroll all 4-year-olds in "quality preschools," Brown has agreed to support a scaled-down proposal to expand access for many low-income children, according to sources, who declined to offer specifics.

Brown and Democratic legislative leaders have also nailed down a framework for spending the cap-and-trade proceeds now collected annually from the state's worst polluters in the fight against greenhouse gases and climate change.

The governor wanted to allocate a third of the fees -- roughly $850 million in the next fiscal year -- to construction of the bullet train. But that figure may drop to as low as 15 percent, with another 5 percent of proceeds spent on intercity rail projects, said Sen. Mark Leno, D-San Francisco, who chairs the Senate's budget and fiscal review committee.

Moving forward, Brown has reportedly agreed to Senate Democrats' pitch to spend a little less than half of the cap-and-trade money generated each year on affordable housing constructed near "green" transit, such as trains and light-rail lines.

"The governor was clear that he wanted some cap-and-trade money spent on high-speed rail, but his comments on what to do with the rest of the money were much more brief," Leno said. "That's where the Senate's plan comes into play."

Another key point of contention is deciding just how much surplus money the state has -- a pleasant reversal from just a few years ago when the state's budget was $26 billion in the red.

Last month, Brown proposed a $107.7 billion general fund spending plan built on conservative estimates for capital gains tax revenue, which came in higher than expected this year but is historically volatile.

The Legislative Analyst's Office projects California will net $2.5 billion more in tax revenue next year compared to Brown's plan. And Democratic leaders say they believe the nonpartisan office.

"The LAO has a long-standing reputation for making revenue projections analytically, not politically," said Rhys Williams, a spokesman for Steinberg.

Despite the differences, political experts say, wrestling with a surplus rather than a deficit makes it a lot easier to please all parties.

"No one will walk away hungry or without something," said Larry Gerston, a political science professor at San Jose State. "But negotiating these last few issues is never a simple task."

BUDGET DEADLINE LOOMS
With just five days left before the Legislature's June 15 deadline to pass a state budget, Democratic lawmakers are working closely with Gov. Jerry Brown to resolve their last disagreements:
REVENUE: Brown wants a $107.7 billion budget built on conservative capital gains tax revenue estimates, and Democratic legislative leaders want a spending plan based on the state legislative analyst's estimate, which is $2.5 billion higher.
HOME CARE WORKERS: Brown wants to block home care workers from earning overtime pay, a move that he says would save the state $91 million next year. The Legislature wants to pay overtime because lawmakers believe failing to do so undermines the entire In-Home Supportive Services program.
PRE-KINDERGARTEN: Brown refused to support Senate President Pro Tem Darrell Steinberg's plan for universal preschool for 4-year-olds, but he has agreed to fund a limited expansion of services for low-income 4-year-olds.
BULLET TRAIN FUNDING: Brown wanted to spend a third of annual cap-and-trade proceeds on high-speed-rail construction, but he has agreed to a smaller allocation and supports a plan to spend some proceeds on affordable housing and "green" transit.
COURTS: Brown has agreed to increase spending on the state's 58 trial courts, the California Supreme Court and the Administrative Office of the Courts -- something lawmakers considered a top priority.